Staff recommends that the City Council Authorize the City Manager to Execute a Project Development Agreement with Johnson Controls to Develop an Energy Services Project (Water Treatment and Wastewater Plant Solar PV System with Battery Backup) pursuant to California Government Code 4217.10-4217.18.
Staff has been working with Johnson Controls Inc. (JCI) to develop a solar facility with battery backup at the Water Treatment Plant on Palmer Ave and the Wastewater Treatment Plant. This project is expected to be placed on land adjacent to the existing water treatment plant. The first step in the process is to execute a project development agreement (PDA). The PDA will provide the basis of the scope, schedule, and deliverables of the PDA as well as the obligations of both parties, and the financial criteria representing the intended outcome of the project.
Under the PDA, JCI will develop a project including engineers costs estimates and savings estimates and various other facility improvement measures as identified in the agreement. The result of the PDA will be the development and anticipated execution of an Energy Performance Contract that will confirm the scope of work, guaranteed energy savings, customer responsibilities, confirm the feasibility of the financial criteria and total price for the work.
Upon execution of the contract, the City agrees that JCI will incur significant cost by providing the services required by the PDA and that all reasonable, actual, project development costs incurred will be included in the Total Price of the Work in the Energy Savings Performance Contract. Since the City does not control the property adjacent to the Water Treatment Plant at this time, JCI has agreed that until the property has been secured and under the control of the City, work performed under the executed PDA will be at their own risk should the City be unable to secure the land.
If JCI proposes a project that meets the Financial Criteria, and the City chooses not to enter into the Energy Savings Performance Contract within sixty (60) days after JCI submits the deliverables of the PDA, the City will be responsible for paying JCI $148,000 as reasonable compensation for services provided under this PDA.
The City shall have no obligation to pay JCI for services performed as part of the Project Development Agreement if:
- JCI and the City enter into the Energy Savings Performance Contract for the proposed project within 60 days after JCI provides the Deliverables of the PDA; or
- JCI is unable to propose a project that meets the financial criteria of this PDA.
- Do not enter into the PDA with JCI and direct staff accordingly.
V. FISCAL IMPACT:
The fiscal impact to the City would be $148,000 if the City chooses not to proceed the a ESPC after JCI has met all of its obligations under the PDA and presents a viable project. If the obligations of the PDA have been met and the City chooses to move forward, the $148,000 would be absorbed in the bond issue related to the financing of this project when that time comes.